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April

Chinese import and export data both sweet and sour

Published: Friday 12 April 2019

  • Brexit procrastination pervades Parliament

  • European Central Bank on hold and has tricks up its sleeves

  • Eurozone industrial production better than forecast but the pressure is on

By David Johnson

Early this morning, we were eagerly expecting the import and export data from China, forecast to show improvement over last month’s quite poor data. While exports have recovered, imports have fallen again, which is not great news for the economies so closely tied to the Chinese import-export relationship, such as Australia. However, a surprise jump in the Chinese Trade Balance surplus has kept the Australian Dollar on an even keel.

Brexit procrastination pervades Parliament
Sterling started the day around $1.3050 and €1.16 in interbank rates. British MPs are off on their jollies for 11 days before coming back and trying to make a cake out of the dogs dinner we all know and love; Brexit. Whilst the end date has been fudged out to October, Prime Minister May is hinting that Britain could leave the EU sooner if a deal can be done that at least 326 British MPs and 27 EU countries will back. As the bulk of the MPs have done their utmost to thwart the referendum result, that seems a little farfetched right now.

Flying circus?
Thursday’s UK market news included a better than expected UK house price survey from the Royal Institution of Chartered Surveyors (RICS). Sterling failed to overtly react; what with all the Brexit news circulating. However, as there is barely a ‘wafffer theen meent’ of UK news today, the Pound will be pushed and shoved by external data. You may wish to google ‘Mr Creosote’ to make sense of that last sentence. On second thoughts, it is rather rude, so please don’t.
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Eurozone industrial production better than forecast but the pressure is on
The Euro is suffering because the EU economy is suffering but, whilst the European Central Bank (ECB) left their base rate on hold yesterday, President Draghi signalled that the ECB has plenty of tools available to stimulate the economy if necessary. Employing them at a time when Germany is in reverse might be prudent.
The rest of the morning brought Spanish inflation numbers as well as Eurozone industrial production. The latter was better than expected and showed signs of improvement, but Germany is floundering, adding to the pressure on the EU to crack a deal with the UK. It also adds pressure to the EU to negotiate something with the US, rather than this Boeing versus Airbus standoff turning into a full scale trade war; a war that nobody wins.

You’re nicked!
A dishevelled Julian Assange was unceremoniously hauled out of the Ecuadorian Embassy yesterday and will most likely spend 12 months in another sort of isolation if he isn’t extradited to Sweden on sex offences, or to the US on theft of government documents offences. Popular guy, that Assange bloke…

A currency conundrum
And 10 years ago today, Zimbabwe finally gave up on the Zimbabwean Dollar and stopped printing the currency. With inflation in the trillions of percentage points and an exchange rate of something upward of Z$ 230 trillion to one USD, there was little hope for the pointless currency. When you haven’t got room to print all the zeros on a bank note, you know you have problems. These days, US Dollars or South African Rand are more commonly used.


Making international payments now or next week? 
Contact the team to discuss your foreign exchange requirements - we're here to make sense of it all and help navigate you through.

 



Friday Funnies 

A man received an unexpected text from his neighbour, Harry:
“I am so sorry Bob. I've been riddled with guilt and I have to confess. I have been taking advantage of your wife, most days and some nights when you're not around. In fact, more often than you I suspect. You see, I'm not getting on with mine; having all sorts of problems but that's no excuse. I can no longer live with the guilt and I hope you will accept my sincerest apology with my promise that it won't ever happen again.”

The man, anguished and betrayed, went into his bedroom and had a blazing row with his wife after he accused her of infidelity. Eventually, she demands to know what prompted such a vile accusation as she starts throwing clothes into an overnight bag and calls her mother to let her know she is coming to stay. Bob is incensed and he pulls out his mobile phone to show her Harry’s confession. Just as he opens the phone and types in his pin number, another text arrives from Harry. It reads, “Sorry Bob. Damned spellcheck, I meant ‘wifi’, not ‘wife’. LOL.”


 

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